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Is MLM a Bad Word?

Ever been confused about how a “home business” works? Of course you have, many of us have. Most people have heard the term MLM (Multi-Level Marketing) and usually at the end of that the word, “scheme” is added – giving the whole business model a bad name. Well…let’s change your negative perception and tell you how your Great Aunt Joan, actually earned that pink Cadillac from Mary KayMary Kay! It’s brilliant really…

Not only are “home businesses” or “MLM’s” very interesting, they are successful. Many of the longest standing organizations in this country have this business model. MLM is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation. Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing. Sounds legit right – so why the bad press?

Mary Kay saleswoman Kathy Jones poses for a photo with her brand new hybrid Cadillac Escalade on Thursday, March 24, 2011, at Moses AutoMall in Huntington.

Well MLM companies have been a frequent subject of criticism as well as the target of lawsuits. Criticism has focused on their similarity to illegal pyramid schemes (hence the “scheme” reference), price-fixing of products, high initial start-up costs, emphasis on recruitment of lower-tiered salespeople over actual sales, encouraging if not requiring salespeople to purchase and use the company’s products, potential exploitation of personal relationships which are used as new sales and recruiting targets, complex and sometimes exaggerated compensation schemes, and cult-like techniques which some groups use to enhance their members’ enthusiasm and devotion. Eesh!

However, as aforementioned, you may know people that sell products from Mary Kay, Avon, Advocare, Tupperware and the like (see more companies in our Featured Home Businesses section). You know people who sell these types of products because they believe in the products and the companies that stand behind them. These companies empower those who sell their products to actually establish their own businesses, selling the products. This is very attractive to many entrepreneurial-minded people who do not want to have a boss watching over them but also want some pre-established structure and support. Most MLM organizations provide a very robust infrastructure and great training as well as impeccable rewards (hello free cars and trips!).

I recently spoke with San Diego based, Vicki Martin, about her experience with Rodan + Fields. Here’s her take on her home business and why the opportunity was so appealing for her and her family, “The decision to join Rodan + Fields Dermatologists came easily. Since 2008 the construction industry [which I was previously in] has been hit hard by our economic downturn and my income has been greatly affected. We were working harder for less like many of our friends. Being part of Rodan + Fields Dermatologists is allowing me to work with highly educated people who share a passion for business and for teamwork. Building a recurring, residual income that grows month over month is going to give my husband and I the peace of mind and financial freedom that is so vitally important to our future. My skin looks better than ever. And, I get to work my job around the rest of my life instead of the other way around.”

So, the next time you meet someone who runs a “home business” or “MLM” give them a high five for taking their career and life into their own hands and becoming an entrepreneur.

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I was a Captain in the US Army, coached Division III Football, became a manager at Dell, left Dell in 2003 because of success in MLM. MLM isn’t perfect but residual income is for real. How else is the average person going to get a residual income? Real Estate? The stock market? Write a book? Real estate and stocks are long term investments. Not replace your job income. I have Billionaires in my organization. They obviously know something is good. If you do MLM in a first class way you won’t lose relationships. And it beats the pants off of working in Corporate America…take advice from someone who has actually done it. Not someone who quit. I wish you all the success in the world.

I have a degree In Criminal Justice and played college football. I did corporate America for about 5 years after college an it made me absolutely miserable. Talk about a pyramid scheme. Corporate America is by far the worst. MLM provided me with Freedom, amazing health and eagerness for the future.

I think our industry has finally hit it’s stride in main stream. More and more companies are realizing that traditional advertising is NOT effective in getting their products or services above all the noise. They know that they need to get their message in the middle of consumers conversations. Network Marketing or perhaps a more up to date term “Social Commerce” is a double win. Pay the consumers who buy and use their prodcuts and services to share their experience with their friends and family. We’ve been sharing for years on services and products we already use; now we can get paid for it. In these tough times, a little extra income can take some pressure off.

Great article! The negative reputation really comes from the illegitimate programs that PRETEND to be network marketing companies. As an attorney that’s represented over 100 clients in the MLM space, both companies and distributors, I’m addicted to working with these passionate entrepreneurs that are working hard to build great companies and change lives. The industry can certainly improve in areas; however, it’s the best thing going right now.

If you want to learn more about the space, check out our site at: www.themlmattorney.com

With the state of the economy MLM, network marketing, and home based business is going to be the ideal financial situation for companies and people looking to get ahead. Learn the secret sauce behind Ambit Energy, the #1 Inc.500 fastest growing company in America broken down. This company has coupled MLM and energy deregulation; giving ordinary people the opportunity to make money every time someone pays a gas and electricity. http://www.youtube.com/watch?v=IV2FodVLMm4&feature=player_embedded

Upon entering the network marketing industry six years ago, the Crawfords were on a mission to create freedom in their lives. At that point, they were working five jobs between the two of them, each working 90-100 hours per week. That obviously left no time for family, friends, themselves or each other. That was not the life or the type of parents that they wanted to be. Venturing out with nothing but faith- no experience, they found a network marketing home-based business opportunity on the internet. Within 22 days of starting their business Rick retired full-time from both of his jobs and Susann retired from being a public school teacher and administrator within that first year at the close of her teaching contract.

Rick: Finding this industry has really changed what I really thought my ideas of how family was because I didn’t have the time or the finances to do the things I wanted to do for my family. I was an absentee father because I worked so many hours that I was never home. My children used to say they knew Santa Clause better than me because they saw him more often. Getting into this industry gave me that time freedom and the financial freedom to be the father and husband I had wanted to be for so long.

Finally I have what I’ve always looked for, what I dreamt of being able to have in my life. I am now able to do for my family- being able to leave a financial legacy and knowing the legacy is not just monetary but also of knowledge. We weren’t capable of always giving to my children financially but can now create more of a future for my family and also for my future grandchildren. They will now have things we never would’ve had the opportunity to give them prior to us coming into this industry. I was working like a normal person out there going from job to job but as I got older my pay got less and less and was leaving me less money, more work, less time to spend as I chose. Less money for my children to help them create their dreams. This industry has shown me that if you dream and you believe, you can have anything and everything as long as you are willing to work for it.

Susann: Being a teacher allowed me to inspire, motivate and teach children. To be able to set them on the right path for their future was something I cherished and I didn’t want to give that up by retiring to work with my husband from home. I was also very disenchanted with teaching; with the entire public school system here in America. I was so lucky to still be able to inspire and help and make a difference in peoples lives. Now I do that for parents, aunts, uncles, grandparents and friends who will in turn pass along what they learn to the children- no I can assist multiple generations, not just one. I now pass along information and training that has revolutionized our lives and our family on a daily basis.

Coming home and working our home-based business together allowed me to spend everyday, all day with my very best friend in the entire world- my husband. Due to the economy, jobs, trying to provide the best life for our children, this was not happening. We never saw each other and barely our children. We knew that we had to figure a way to change that and be better for ourselves, for our children and for each other. That was not the life, not the type of parents that we wanted to be. Most importantly, I have been given the most important thing in the world that I realized I was missing out on- it gave me back my son!

Our youngest child, an absolutely and amazing blessing in our lives was born riddled with disabilities, legally blind without his glasses, having many learning disabilities. He was given special help and assistance in school and we were so grateful for the added help and assistance that he was given, but it also was slowly eating away at his own belief in himself on a daily basis. He saw other children did not need that extra help. In his eyes, they were normal and he was not. He came to us at the age of 10 and said “I just want to be like everybody else, to be normal!”

As a parent, words like those tear you apart. Always wanting to save your children from pain, to help them not make the same mistakes that you have in life and make their lives easier. This was something that neither Rick or I could “fix” or even help with. We didn’t know what to do to help him. He told us that it was watching us achieve our dreams and assisting others create massive success in multiple areas within their lives that convinced him this was possible. He came up with his own plan by utilizing what he heard from us, what we were learning in our business. He put his own plan into action. It’s a blessing that within one year, on his own, he got himself out of all special-ed classes, no modifications and achieved a 4.0 GPA being the first student in our state to be a special-ed student inducted into the National Junior Honor’s Society. Every day he is an inspiration and a motivation to me in my business and my personal life. This Is just a little of what a home business can do for you…

I started my company Commercial Energy Consultants LLC are two unsuccessful MLM energy tries. My conclusion: MLM does not work for energy deregulation. Only when I started CEC did my company and residual income start to grow. And grow it did: to 150,000.000 KWH/therm under contract with 500 client relationships in less than two years. CEC offers no up front or recruiting bonus only residual income backed by 1 to 3 year contacts based on energy consumption. Beware of MLM companies that base your income on recruiting and product sales.

It’s great to see an article that distinguishes between those who give MLM a bad name, and those who are truly passionate about this business model.

Those of us who’ve achieved success in “MLMs” understand that this business is all about empowering *others* to achieve their dreams of financial freedom. It’s about giving, not taking. Along the way we build great relationships and enjoy a deep sense of personal satisfaction from helping others.

That philosophy has propelled my teams to success over the years and I’m proud to be in MLM. High five!